Bitcoin ETF Inflows Surge 175% as BlackRock Leads Bull Charge

U.S. spot Bitcoin ETF inflows surged 175% year-over-year, according to data from various sources. This significant increase in investment reflects the growing interest and confidence in the cryptocurrency market among institutional investors.

BlackRock, the world's largest asset manager, led the bull charge with its iShares Bitcoin Trust (IBIT) dominating inflows. On Feb. 4, spot Bitcoin ETFs collectively pulled in $341 million, with BlackRock's IBIT accounting for $249 million of that total. This marked a stark contrast to the previous day, Feb. 3, when Bitcoin ETFs recorded $235 million in net outflows, snapping a four-day inflow streak. Fidelity's FBTC took the hardest hit, with $177 million exiting.

Spot Ethereum ETFs also saw significant inflows, totaling $308 million in net inflows on Feb. 4. This marked four consecutive days of positive momentum, according to SoSoValue. On Jan. 31, Bitcoin ETFs saw $319 million in inflows, continuing the prior four-day trend, while Ethereum ETFs added a more modest $27.8 million.

The inflows into Bitcoin and Ethereum ETFs came amidst a liquidation storm in the crypto market between Feb. 1 and Feb. 3. Somewhere between $8 billion and $10 billion in leveraged positions were wiped out, leading to a market reset. Despite the market turbulence, ETF investors stepped back in and bought the dip, bringing inflows back on Feb. 4.

BlackRock is not only leading the way in terms of inflows but also making moves to streamline operations for its Bitcoin ETF. The firm filed an amendment with the SEC to allow in-kind redemptions for its Bitcoin ETF. If approved, institutional investors could swap ETF shares directly for Bitcoin instead of cash, potentially cutting costs and streamlining operations.

The surge in U.S. spot Bitcoin ETF inflows signals that institutional investors remain interested in the cryptocurrency market despite its volatility. As the market continues to evolve, investors are looking for ways to gain exposure to cryptocurrencies through regulated and established investment vehicles like ETFs.